00:00Bloomberg has also learned that Anthropic, we're switching to AI, is said to be in talks to buy startup Descartes
00:05AI for about $6 billion, its largest known acquisition.
00:09Now, Descartes' chip efficiency software would reportedly help Anthropic's infrastructure absorb more demand for its AI models.
00:17Let's get more from Matt Bloxham, senior analyst at Bloomberg Intelligence.
00:20Matt, as always, thank you for being here.
00:22Look, the deal is yet to be finalized, but actually it would be a very large acquisition, the largest known
00:28acquisition for Anthropic.
00:30So why is this company so important to them?
00:32You touched on it with this kind of optimization.
00:35So, I mean, Descartes does three things.
00:37It creates kind of essentially real-time AI high-quality video rendering.
00:41So imagine if you're trying on a dress in a shop, you can kind of see yourself in super high
00:45quality.
00:45It creates world models, so virtual models of the real world, which is good for training, physical AI, robotics and
00:52things like that.
00:53But then the third thing they have is this optimization stack.
00:56And this is, I think, really where they see the value, because compute is a scarce resource, and it's also
01:01incredibly expensive.
01:03And Anthropics models are the most expensive out there.
01:06And companies are getting more sensitive about how much they're spending on AI.
01:09And this optimization stack essentially allows the chip manufacturers, the NVIDIAs, those kind of people, to squeeze every last bit
01:17of efficiency out of their technology.
01:19So I think that's the thing that they're really interested in and could really quite fundamentally shift Anthropics' appeal to
01:26its customers.
01:28And Matt, so Anthropics confidentially filed for this IPO in June.
01:32I mean, do we know valuation?
01:34Do we know when it starts trading?
01:36We're trying to find out.
01:37We don't know valuation.
01:38There's also been some kind of suggestions out there, actually.
01:40So I think the Financial Times are reporting something like a $2 to $3 trillion valuation.
01:44Now, there aren't many public peers, but if you look at where SpaceX is trading, on one year forward, with
01:5226 estimates, it's probably around 35 times sales, 2027 around 16.
01:58That would give you a spread of probably between $2 to $3 trillion.
02:03I think probably the lower end of that is probably more realistic, where you're going to be anchored perhaps a
02:07bit below $2 trillion for me.
02:09I think this Descartes deal, if it happens, you know, compared to $2 trillion valuations, $6 billion is a drop
02:16in the ocean.
02:16I imagine most of that would be in equity to the founders.
02:19So it's like nothing, but actually the kind of the value it adds in terms of the fundamental story they
02:24can take to investors is huge.
02:27A little bit like the cursor acquisition that SpaceX kind of made through its own IPO.
02:32So I think this is a positive addition to that story.
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